Should You Prefer to Receive $100,000 Right Now or $10,000

question 86

Multiple Choice

Should you prefer to receive $100,000 right now or $10,000 at the end of each of the next 12 years?

• A) $100,000 now.
• B) $10,000 at the end of each of the next 12 years.
• C) The answer depends on the time value of money.
• D) Either alternative is equally valuable.

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Definitions:

Inelastic Segment

A portion of the demand curve where consumers' demand for a product does not significantly change with a change in price.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that consumers are willing and able to purchase at various prices.

Nondiscriminating Monopolist

A monopolist who charges all consumers the same price for its product or service, regardless of demand differences.

Marginal Revenue

The additional income that an organization receives from selling one more unit of a good or service.